Buying a Home
If you have any questions or would like more information about buying a home please Contact Us.
A RE/MAX Sales Associate can help you through the entire process of buying a home, starting with the mortgage and continuing right through closing – and beyond. He or she can help you shop for the best interest rate and terms and, if you wish, suggest mortgage lenders.
Get Preapproved for a Loan
Obtain a copy of your credit report and your FICO score and, if necessary, do what you need to do to improve it. The higher your FICO score, the better interest rate you can command. You can get this information online; your RE/MAX agent can also help you. Contact several lenders and determine which one will give you the best deal.
Determine Your Price Range and Area(s) in Which You're Interested
By now you should have a good idea of how much home you can afford. This helps you narrow down your home search. You should also begin researching the neighborhoods in which you might want to live. Your RE/MAX agent can help.
Decide Which Amenities and Features You Must Have
How many bedrooms and bathrooms do you want? Would you prefer a newer home or an older one with established landscaping? Are hardwood floors a must? Is an updated kitchen important to you? Walk-in closets? Which features would you be willing to give up if you find the otherwise-perfect home?
Begin Testing the Market
On remax.com, you can find listings that meet your criteria as well as neighborhood data. Identify properties that seem to be fits for you, take an afternoon and go on a driving tour. See what's available in your price range and explore neighborhoods.
With Your Agent, Begin Seriously Looking at Homes
Your agent can add to the list of homes you've already identified – including ones that have just come on the market. Look at homes with a critical eye – does the floor plan work for you, is the property in good condition, would it be right for your lifestyle? In short, can you imagine yourself and your family living there? Take notes at each home you visit. What do you like and not like? Narrow down your choices; re-visit homes in which you're interested. See them at different times of the day.
Make an Offer
When you've identified the home you want to buy, be prepared to help your agent prepare a written offer quickly. Your agent will be familiar with market values and will help you arrive at a price that gives your offer the best chance of being accepted. At this stage, try not to become emotionally attached to a home. Your offer may not be accepted for any number of reasons. Have backup homes in mind. Be prepared to negotiate through your agent with the sellers.
Once Your Offer Is Accepted:
- You'll be asked to submit an earnest money deposit that usually isn't refundable.
- Begin making moving arrangements (select a mover, obtain change-of-address cards, inform friends and relatives).
- Have the property professionally inspected.
- If necessary, request repairs.
- Obtain home-owner's insurance.
- Contact utilities (phone, water, power, etc.).
- A few days before closing, stage a walk-through.
- Obtain a cashier's check for the down payment and closing costs.
- Make sure the terms and conditions of the loan statement are correct.
- Carefully read everything before you sign.
ENJOY YOUR NEW HOME!
Why You Should Use a REALTOR® in Your Home Search
Buying a home is probably the largest investment you'll make in your lifetime. Having an experienced, knowledgeable RE/MAX professional representing you in this transaction just makes good sense. Buying a home is not like buying a car, a mutual fund or other commodity. It can be a life-changing event. RE/MAX agents fully understand the real estate process – and just as important, they understand your local market. Of course, they know the right steps to take, but they can also help you avoid a misstep in your home purchase. If a new freeway is going to be built a few blocks away, they'll probably know it. If you're unsure about school districts, they'll be able to direct you to answers. If you're unsure of a builder's reputation, they'll know how you can confirm it.
Your RE/MAX Sales Associate also performs another important function: minimizing the emotion involved in a home transaction. You may be in love with a home, but your agent can point out factors that might not make it right for you.
Information courtesy of RE/MAX.com
Buyers Resource Center
As the experts we have compiled a list of articles to help you in preparing to buy, searching for, and moving into your dream home. If you have specific questions or want to talk to a professional, please do not hesitate to fill out the form below and we will be sure to help you with all your real estate needs and questions. Sign up here to create your own personal Home Hunter account. With Home Hunter you can save your home search and we will do the looking! When the home you are looking for is listed, we will email it to you!
Buying a home often presents some rather unique challenges. Contact a RE/MAX Gateway REALTOR® and we will make the process as stress-free as possible. Contact us to get started!
A RE/MAX Sales Associate can help you through the entire process of buying a home, starting with the mortgage and continuing right through closing – and beyond, contact us and we will help you take this big step.
Buying your first home is a memory you will keep forever, make it a good one, contact us and we will help you take this big step.
Ditching the land lord and taking the leap into the realm of home ownership? Consumers who have the resources to buy a home shouldn’t shy away from this type of financial decision.
Thinking of a better home for you and your family? Families grow quick and before you know it you have a bunch of little children running around. If you're rapidly running out of space, or if you're planning on having a family, then up-sizing to a larger home could be your best bet.
Even though you may be less stressed after you buy a home, there are still things you need to keep in mind, or that you can do, to make your transition into a new home a smooth one.
I want to buy a home. Where do I start? This article will give you all the information you need to start your home buying process. This article will also provide answers to the most common questions that buyers ask.
Many factors come into play in the initial offer. Some say always offer 10% less. Unfortunately, this route could end you up in second place on that competitively priced "perfect" home for your needs. And, second place is no fun. Too low of an initial offer could insult the Seller. Read more on what to offer for your dream house by visiting this article!
The amount of time, effort and energy spent into selling or buying a home can be extensive and if you to do it by yourself, and not with the assistance of a REALTOR® or agent, you may run into the risk of losing money and getting a less-than-favourable deal.
It's important to hire a knowledgeable, independent home inspector for advice on the overall condition of the property. Many companies specialize in only one area of inspection, and others will group several together and offer a package price. Find more about getting a home inspector by visiting this article.
When buying a home, one word you will hear often is insurance. Insurance is the type of service you buy hoping that you will never have to use it. The right insurance can give you a sense of security in knowing that you are adequately protected. Visit this article for more about purchasing home insurance.
Generally, there are two forms of title insurance. Lender's title insurance, required by most lending institutions, is normally written in the amount of the mortgage and protects the lending institution from losses resulting from title defects. Read more about lender's title insurance and the other form by viewing this article.
Relocating can be hard on anyone involved, for helpful information or tips on how to relocate easier visit this page and we will be happy to help you.
Are you thinking of moving to our surrounding area? Learn more about our area and find links to homes and properties for sale in each City or Town by visiting this page.
Whether you choose to hire outside professionals or you choose to do it yourself, being prepared will ultimately make the move much smoother. Visit this page to read more about our moving article.
While buying or renting a new home can bring joy and excitement, most people can agree that moving from one home to another, can be troublesome.
Moving by yourself and not with the assistance of a moving company can be a practical option. You’ll save money and probably be able get some free help from your friends and family.
There's always the risk of finding a less-reputable mover who can end up costing you more money and time than you wanted. Visit this page for more about hiring a mover.
Some children might be frightened by the prospect of moving, but, with your care, guidance and positivity, the process of moving with your children will be enjoyable for them.
Financing & Closing Costs
Need help getting the right mortgage for your home? Contact us and we will help you to find the lender you are looking for.
Our calculator will help you calculate these costs, so you know how much you'll need to save.
Most mortgage lenders take the guess work out of applying for a loan by figuring out for you the amount you can afford to borrow. Then, they give you a printed document stating the maximum mortgage amount you qualify for based on your particular finances and income.
There are various aspects of a mortgage loan that you have to be aware of so you fully understand the type of loan that you are receiving. In addition, be certain that you know your credit records, income, debts and assets.
A home warranty is an affordable way to cover the costs of unexpected mechanical failure of a major system or appliance. A home warranty is specifically designed to cover the kinds of repairs that home insurance does not: appliances, plumbing and electrical, air conditioning and furnaces, and pool equipment. Ask your agent for more information on home warranties that are available.
The mere mention of the word ‘contract’ leaves many feeling trapped and wary, often rightfully so. The Buyer Agency Agreement, however, is not a contract to be feared. Ask your agent for more details!
When looking for your dream home lots of questions pop-up, it is always helpful to have people on your side. Contact Us and we will help you to find your dream home.
- What price home can I afford?
- How do I find out about the condition of the home?
- How low can I consider offering?
- How and what do I negotiate?
- Down payments; should I put more or less down?
- What is title insurance?
- What steps should I take when looking for a home loan?
- Is it possible to negotiate interest rates?
- Is it better to buy a new home or a resale?
- Fixer-Uppers - Are they good or bad?
- Can you borrow the money to repair?
- Is there a good "return" for my efforts?
- Are foreclosures good or bad ideas?
- How much does my REALTOR® need to know?
- Why should I consider a Home Warranty?
Question 1: What price home can I afford?
As a "rule of thumb" you can afford to buy a home equal in price to twice your gross annual income. More precisely, the price you can afford to pay for a home will depend on six factors:
- Your income
- The amount of cash you have available for the down payment, closing costs and cash reserves required by the lender.
- Your outstanding debts
- Your credit history
- The type of mortgage you select
- Current interest rates
Lenders will analyze your income in relation to your projected cost of the home and outstanding debts. This will determine the size loan you can borrow. Your housing expense-to-income ratio is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment on your loan, property taxes and hazard insurance. The sum of these costs is referred to as "PITI." Monthly homeowner association dues, if you're purchasing a condominium or townhouse, and private mortgage insurance are added to the PITI. Your housing income-to-expense ratio should fall in the 28 to 33 percent range. 28 percent of your gross monthly income is allotted toward PITI. 33 percent of you gross monthly income is allowed for PITI and all long-term debt. Some lenders will go higher under certain circumstances. Your total income-to-debt ratio should not exceed 34 to 38 percent of your gross income.
Question 2: How do I find out about the condition of the home I'm considering?
First and foremost, it is strongly recommended that you hire a professional person to inspect the home. Many inspectors belong to the American Society of Home Inspectors (ASHI). They attend seminars and stay abreast of the latest developments. Secondly some states require sellers to complete a disclosure form revealing everything known about their property. Home sellers are required to indicate any significant defects or malfunctions existing in the home's major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems.
The form also asks sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachment of easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property. Also look for settling, sliding or soil problems, flooding or drainage problems.
People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions, if the homeowners association has any authority over the subject property and ownership of common areas with others. Be sure to ask questions about anything that remains unclear or does not seem to be properly addressed by the forms provided to you. If you would like more information on Home Inspections contact us at any time and we will assist you in finding a trusted inspector.
Question 3: How low can I consider offering?
There are always some sellers who for some reason must sell quickly, however in general, a very low offer in a normal market might be rejected immediately. In a strong buyer's market, the below-market offer will usually either be accepted or generate a counteroffer. If few offers are being made, an outright rejection of offers becomes unlikely. In a strong seller's market, offers are often higher than full price. While it is true that offers at or above full price are more likely to be accepted by the seller, there are other considerations involved:
1. Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, such an offer, even at full price, may not be as attractive as an offer without that condition.
2. Is the offer made on the house "as is," or does the buyer want the seller to make some repairs before the close of escrow or make a price concession instead?
3. Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.
4. Are there any requests for seller concessions, such as asking the seller to contribute towards points and/or closing costs? If so, the offer is not really full price.
For more detailed information you can read more on what to offer, you can find a professional to assist you or contact us and we will be happy to assist you.
Question 4: How and what do I negotiate?
Different sellers price houses very differently. Some deliberately overprice, others ask for pretty close to what they hope to get and a few (maybe the cleverest) under price their houses in the hope that potential buyers will compete and overbid. A seller's advertised price should be treated only as a rough estimate of what they would like to receive. If possible, try to learn about the seller's motivation. For example, a lower price with a speedy escrow may be more acceptable to someone who must move quickly due to a job transfer. People going through a divorce or are eager to move into another home are frequently more receptive to lower offers. Some buyers believe in making deliberate low-ball offers. While any offer can be presented to the seller, a low-ball offer often sours a prospective sale and discourages the seller from negotiating at all. And unless the house is extremely overpriced, the offer probably will be rejected anyway. Before making an offer, also investigate how many comparable homes have sold for in the area so that you can determine whether the home is priced right.
Question 5: What about my down payment, should I put more or less down, if we can afford it?
Various types of loan programs exist. Some require a minimum of 3 percent down payment (FHA Loans) or 5 percent on conventional loans. Veterans can purchase with no money down (VA Loan). Putting down as little as possible allows buyers to take full advantage of the tax benefits of home ownership. Mortgage interest and property taxes are fully deductible from state and federal income taxes. Buyers using a small down payment also have a reserve for making unexpected improvements. It may be more prudent to make a larger down payment and thereby reduce the amount of debt that must be financed. Once a buyer puts twenty percent or more as a down payment on their desired home, they will waive the requirement for mortgage insurance. Mortgage insurance is a requirement on all loans, with the exception of veterans guaranteed loans. That means a full years premium for the insurance is collected "up front' at the closing of escrow, plus you will be paying monthly as part of your PITI, principle-interest-taxes-insurance.
Question 6: What is title insurance?
Title insurance is a form of insurance in favor of an owner, lessee, mortgage or other holder of an estate lien, or other interest in real property. It indemnifies against loss up to the face amount of the policy, suffered by reason of title being vested otherwise than as stated, or because of defects in the title, liens and encumbrances not set forth or otherwise specifically excluded in the policy, whether or not in the public land records, and other matters included within the policy form, such as lack of access to the property, loss due to unmarketability of title, etc. The title policy form sets forth the specific risks insured against. Additional coverage of related risks may also be added by endorsements to the policy or by the inclusion of additional affirmation insurance to modify or supersede the impact of certain exceptions, exclusions or printed policy "conditions." The policy also protects the insured for liability on various warranties of title. In addition, the policy provides protection in an unlimited amount against costs and expenses incurred in defending the insured estate or interest. Before it issues a title policy, the title insurance company performs, or has performed for it, an extensive search, examination and interpretation of the legal effect of all relevant public records to determine the existence of possible rights, claims, liens or encumbrance that affect the property.
However, even the most comprehensive title examination, made by the most highly skilled attorney or lay expert, cannot protect against all title defects and claims. These are commonly referred to as the "hidden risks." The most common examples of these hidden risks are fraud, forgery, alteration of documents, impersonation, secret marital status, incapacity of parties (whether they be individuals, corporations, trusts or any other type), and inadequate or lack of powers of REALTORS® or fiduciaries. Some other hidden risks include various laws and regulations that create or permit interests, claims and liens without requiring that they first be filed or recorded in some form so that the potential buyers and lenders can find them before parting with their money. Since the cost for homeowner’s title insurance is usually sharply reduced when taken simultaneously with the issuance of a purchase money mortgage, the risk is one that a well informed buyer should not take. In fact, several states have adopted statutory requirements which require a notice to home buyers as to the availability of title insurance similar to that being obtained by their purchase money mortgages.
Question 7: What steps should I take when looking for a home loan?
It is strongly recommended that home buyers are pre-qualified or pre-approved for a loan as their first step in the process. By being pre-qualified, a buyer knows exactly how much house they can afford. They can make more informed decisions in the marketplace. This does not mean they will definitely get the loan because their credit reports, wages and bank statements still need to be verified before you can receive a commitment from the lender for the loan. Almost all mortgage lenders pre-qualify people at no charge. Many of them will even do it on the internet. In order to be pre-approved, an application will be taken. For a fee, your credit report will be pulled, your employment and income will be verified, you're checking and savings accounts will also be verified. In other words, all the necessary documentation will be completed in order for you to obtain a loan. The only things remaining will be for you to find a home, obtain an appraisal on it to prove its value to the bank and perform whatever inspections you may want on the property. This process considerably shortens the time frame to closing.
Question 8: Is it possible to negotiate interest rates?
Compare the mortgage charts published in most newspapers. Occasionally some lenders are willing to negotiate on both the loan rate and the number of points. This isn't typical among many of the established lenders who set their rates. Nevertheless, it never hurts to shop around, know the market and try to get the best deal. Always look at the combination of interest rate and points and get the best deal possible. This is reflected in what is called the APR or Actual Percentage Rate. The interest rate is much more open to negotiation on purchases that involve seller financing. Generally, these are based on market rates but some flexibility exists when negotiating such a deal.
Question 9: Is it better to buy a new home or a resale?
Sales price increases in either type of housing are strongly tied to location, growth in the local housing market and the state of the overall economy. Some people feel that buying into a new-home community is a bit riskier than purchasing a house in an established neighborhood. Future appreciation in value in either case depends upon many of the same factors. Others believe that a new home is less risky because things won't "wear out" and need replacement.
"Existing homes have been appreciating a little more than new homes but every once in awhile they're at the same level and sometimes the new home prices go up a little quicker" according to the National Association of REALTORS® (NAR). NAR figures show the median price of existing homes went up 3 percent between 1994 and 1995; projections are that prices will increase 3.2 percent in 1996 and 1.2 percent in 1997. New home median prices went up 0.8 percent in 1995 and are likely to increase another 0.5 percent in 1996. For 1997, the group predicts a 1.1 gain in median new home prices.
Question 10: Fixer-Uppers - Are they good or bad?
Distressed properties or fixer-uppers can be found everywhere. These properties are poorly maintained and have a lower market value than other houses in the neighborhood. It is often recommended that buyers find the least desirable house in the best neighborhood. You must consider if the expenses needed to bring the value of that property to its full potential market value are within your budget. Most buyers should avoid run-down houses that need major structural repairs. Remember the movie "The Money Pit?" Those properties should be left to the builder or tradesman normally engaged in the repair business.
Question 11: Can you borrow the money to repair?
HUD's Rehabilitation loan program, Section 203(K) is a program designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old. Condominiums are not eligible. A 203(K) loan is frequently done as a combination loan. You purchase a "fixer-upper" property "as is" and rehabilitate it. Or, you may refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan.
Investors are required to put 15 percent down. Owner-occupants have a required down payment of 3 to 5 percent. A minimum of $5,000 must be spent on major improvements. Major repairs can be: a new heating system, roof, replacement windows, etc. You may then also finance additional repairs and improvements i.e.: new carpeting, kitchen cabinets, appliances, etc. You must of course "qualify" for the total amount you will be borrowing through this program. Two appraisals are required. These appraisals will be on the property "as repaired" not "as is." Plans and specifications for the proposed word must be submitted for architectural review and cost estimation. Once approved mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.
Question 12: Is there a good "return" for my efforts?
Remodeling a home improves its livability and enhances curb appeal, making it more salable to potential buyers. Some of the popular improvement projects are updated kitchens and baths, enlarged master bedroom suits, home-office additions and increased amenities in older homes. The resale market is often difficult because you are competing with new construction. You need to give your home every competitive advantage you can if you are selling an older home.
Home offices are a relatively new remodeling trend. Adding one to a house often recoups 58 percent of the costs, according to a survey found in a report called "Cost vs. Value Report" in Remodeling Magazine. For a detailed breakdown on what renovations have the highest return on investment read our detailed section, and remember we have agents who will come out and give you professional advice on what you can do to make your house sell faster for more, contact us.
Question 13: Are foreclosures good or bad ideas?
The incidence of foreclosures is cyclical, based on national and regional economic trends. People can get a rough estimate of the number of foreclosures in a target area by dividing its population by 2,500, according to John T. Reed of Reed Publishing, Danville, Calif. New England had so many foreclosures that newspapers added foreclosures-only sections to their real estate classified advertising section. But these states recovered in the mid-1990's. Buying directly at a legal foreclosure sale can be risky and dangerous. The process has many disadvantages. There is no financing so purchases require cash. The title needs to be checked before the purchase or the buyer could buy a seriously deficient title. The property's condition is not well known and generally, an interior inspection of the property is not possible before the sale. Additionally Estate (probate) and foreclosure sales are exempt from some states' disclosure laws. The law protects the seller (usually an heir or financial institution) who has recently acquired the property through adverse circumstances and may have little or no direct information about it. You can contact us at any time and we will assist you in making an informed decision.
Question 14: When buying a home how much does my real estate REALTOR® need to know?
Be sure to find out who your real estate REALTOR® is representing before you tell them too much. The degree of trust you have in a REALTOR® may depend upon their legal obligation of representation. An agency working with a buyer has three possible choices of representation. The REALTOR® can represent the buyer exclusively, called buyer agency, or represent the seller exclusively, called seller agency, or represent both the buyer and seller in a dual agency situation. Some states require REALTORS® to disclose all possible agency relationships before they enter into a residential real estate transaction. Here is a summary of the three basic types:
1. In a traditional relationship, real estate REALTORS® and brokers have a fiduciary relationship to the seller. Be aware that the seller pays the commission of both brokers, not just the one who lists and shows the property, but also to the sub-broker, who brings the ready, willing and able buyer to the table.
2. Dual agency exists if two REALTORS® working for the same broker represent the buyer and seller in the same transaction. A potential conflict of interest is created if the listing REALTOR® has advance knowledge of another buyer's offer. Therefore, the law states that a dual REALTOR® shall not disclose to the buyer that the seller will accept less than the list price, or disclose to the seller that the buyer will pay more than the offer price, without express written permission.
3. A buyer can hire a REALTOR® who will represent their interests exclusively. A buyer's REALTOR® usually requires a retainer which is refunded once the buyer purchases a house. The amount of the retainer differs from REALTOR® to REALTOR®. A buyer's REALTOR® can perform enhanced services for the buyer, such as preparing a market analysis on the home they are buying. All information provided to the buyer's REALTOR® shall remain confidential and will not be relayed to the Seller's REALTOR®.
Question 15: Why Should I Consider a Home Warranty?
Home ownership is expensive enough all on its own, without adding the cost of repairs and replacements. When moving into a home where appliances and systems have been previously used, there is always the chance that the general wear and tear, or the way in which they were previously used and maintained, could cause breakdown and/or complete failure. These repairs/replacements can be astronomically costly and often times occur unexpectedly. A home warranty will protect you financially from most of the frequently occurring breakdowns of home system components and appliances. Contact Us if you have any questions about home warranty's or would like more information about them.